In CFD trading, the spread is the difference between the buy price and the sell price quoted for an instrument. The buy price quoted will always be higher than the sell price quoted, and the underlying market price will generally be in the middle of the these two prices. ​​

When you place a trade, you will either buy or sell the particular product you're trading, depending on whether you believe the underlying market price will rise or fall.

Once your trade is placed and the price has moved in your favour beyond the cost of the spread, it will be a profit making trade. Likewise, while it remains between the spread range or outside of it against you, the trade will be a losing trade.

The spread is one of the key costs involved in CFD trading – the tighter the spread is, the better value you're getting as a trader. Note that there are other potential costs to consider, for example in CFD trading some markets involve a commission charge, or a combination of spread and commission.

The spread is the last large number within a price quote.​

<0 class="Section-title">Example 10>

The spread on the UK 100 shown here is 1.0, calculated by subtracting 6446.7 (sell price) from 6447.7 (buy price).

<0 class="Section-title">Example 20>

The spread on the GBP/USD shown here is 0.9. If you subtract 1.65364 from 1.65373, that equals 0.00009, but as the spread is based on the last large number in the price quote, it equates to a spread of 0.9.

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Contracts for difference (CFD) are leveraged products and carry a high level of risk to your capital as prices may move rapidly against you. It is possible to lose more than your initial investment and you may be required to make further payments. Digital 100s and Countdowns carry a level of risk to your capital as you could lose all of your investment. Invest only what you can afford to lose. CFDs, Digital 100s and Countdowns involve the risk of substantial loss and trading such products may not be suitable for all clients therefore ensure you understand the risks and seek independent advice. Please read our disclaimers, risk warning/disclosures, terms of business and associated documentation here

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